U.S. SILVER CORP Q2 2012 NET INCOME IS A NEGATIVE $2.3 MILLION

August 13, 2012 By 8 Comments

Submitted by SD Contributor SRSrocco

U.S Silver Corp just had their Q2 conference call and pre-released their results.  We now know what the break-even cost for U.S. Silver Corp is… it is more than $29.41 oz (the average price per kitco for Apr-Jun 2012).

Here is the their results for Q2 2011:

Here we can see that U.S. Silver had $6.5 million in net income for the second quarter of 2011.  They did produce more silver this quarter compared to the Q2 2012, but we can see that their cost of sales were $18.5 million.

Now, if we look at their preliminary results below, we can see the stark difference a year can make:

Now… I am not going to compare U.S. Silver’s Q2 2012 to Q2 2011, because they produced 100,000 more ounces the previous year and the average price of silver was much higher.  But, if I show what took place in Q1 2012, we can see how things have changed in just 3 months:

U.S. SILVER Q1 2012 RESULTS

TOTAL REVENUES = $23 million

COST OF SALES = $16.4 million

NET INCOME = $2.83 million

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U.S Silver also produced 24,000 oz less silver in Q2 compared to Q1, but the cost of sales were also lower by $3 million.  This is how the Executive Chairman of U.S. Silver sugar-coated the losses in the quarter:

 said U.S. Silver’s Executive Chairman Gordon Pridham. “We are pleased to report the reduction of cash costs with Q2-2012 being lower than the previous two quarters as efforts remain focused on cost reduction.

Yes, it is true they lowered cash costs down from $21.06 Q1 to $19.31 Q2, but the lower price of silver is what really hurt their balance sheet.  I would imagine that their break-even  silver price would be more like $30-32… and not the fair price of $15 an ounce put forth by nitwits like Ned Schmidt.

Again… I bring this up to show how the lower price of silver is killing the silver miners.  Those with the highest costs and lowest production figures get hit first.


Check out these similar articles:

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  4. SILVERCORP METALS Q2 NET EARNINGS DECLINE 72%
  5. 2011 US Gold Eagle Mint Sales Hit 1 Million Ounces, Silver Eagle Sales Near 40 Million
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Comments

  1. Avatar of ALIEN ALIEN says:
    August 13, 2012 at 2:22 PM

    so the manipulation is going to cause silver miners to go bankrupt, further exacerbating the tight supply

  2. Avatar of croc987 croc987 says:
    August 13, 2012 at 2:58 PM

    Keep those great posts coming SRSR.  A+ for truthiness. 

  3. Avatar of AGXIIK AGXIIK says:
    August 13, 2012 at 2:59 PM

    This company is bleeding cash too boot.  Down almost $9,000,000 in 6 months.  At this rate they could be under by year end. They may have to dump other assets quickly, sell to another miner or private firm (Chinese) or shut down temporarily.

  4. Avatar of SRSrocco SRSrocco says:
    August 13, 2012 at 3:18 PM

    DIDN’T SPROTT JUST TAKE A BIG POSITION IN THEM RECENTLY?

  5. Avatar of Bay of Pigs Bay of Pigs says:
    August 13, 2012 at 4:24 PM

    This is truly astonishing. How on earth can miners continue to mine at these absurdly cheap prices?

    It appears we are headed for disaster if silver doesn’t move up substantially by year end.      

  6. Avatar of Silverholic Silverholic says:
    August 13, 2012 at 10:30 PM

    “We now know what the break-even cost for U.S. Silver Corp is… it is more than $29.41 oz”

    Looking at the silver price history it has been much lower than $29 for decades.
    Has the break even cost gone up significantly at the last couple of years, or miners have been operating at a loss?

    I have been a silent follower of this wonderful website for many months now. Thank you Doc and all other members for the excellent content and comments.

  7. Avatar of NetRanger808 NetRanger808 says:
    August 14, 2012 at 12:24 AM

    Silver Corp is currently $5.46 a share. This could be a great move for Warren Buffet and or Robert Kiyosaki to take over the mine a cheap rate. You never know if this could have been a well thought out plan. Never under estimate your enemies! There appears to have been some serious thought put into this move. Now if this mine is a viable mine and the investors are not the big boys. 

    Therefore it would be a great take over move (Gordon Gekko) Greed is Good! Greed Works! Take out the competition buy the company at a low share and reap the rewards when and if Silver makes the big move. 

  8. Avatar of XC Skater XC Skater says:
    August 14, 2012 at 9:19 AM

    And, how did they come to exist in 2012 when prices until recently were much lower?
    Could costs really spike up by that much, or are they just re-milling the very thinnest ore they have on hand?

    What to do, get in on what seems like a stock price bottom, or avoid them as their bankruptcy is imminent at current market conditions? I agree that for Buffett types this would be an interesting project to get in on, nurture until the time inevitably comes. Maybe this mine should not operate at all, and only greese their machinery until an order at $35/oz and over reaches them. More mines should do that, BTW, and not be tempted to promise any volume at modest prices. If prices indeed are much less fair than we previously were told (I accepted $!7/oz as fact recently), then miners have reason to take action. All but Barrick, who apparently still has a good amount of silver to buy for a contract they never should have signed.

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